India: The jewel of the old British Empire

Commentators of all persuasions give us constant reports, often positive and occasionally dismal, on the economic and political health of China and incessantly tell us that our future will be determined by the power brokers of Peking. Rarely do they comment on India’s role in our prosperity. Indeed, they make it clear that if China dumps us as a trading partner, we will be finished as a financially viable nation. This overemphasis should cause us concern as our fascination with China is a dangerous one when all the lessons of life tell us never to have too many eggs in one basket, especially when that basket has a vastly different design to the one we normally use.

There are a number of compelling reasons why we should turn our eyes away from China to have a good look at the many opportunities that await us in India. For example, India is the world’s largest democracy, with a similar system of government to ours, and its commerce and industry operate on a basis that is compatible with our experience. Of particular importance to us is that British Common Law is the basis of India’s legal system and it has an independent judiciary. Additionally, India’s economy is based on massive internal demand that is dominated by the private sector, a condition that is a favorable base for our trading potential.

The situation in China is the opposite. They have merely a pretense of democracy, while their implementation of government and their style of doing business is poles apart from ours. Chinese law is remote from the concept of Common Law and appears to change according to the occasion and the opportunity for China to create an advantage. Added to this, is the undeniable fact that the judiciary is not independent. State capitalism dominates the China market place and the economy is far more heavily dependent on exports than it is on internal consumption.

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Splendid opportunities for an expansion of Indian trade and investment with Australia clearly abound in a number of ways. They have a massive need of new infrastructure which will take many decades to satisfy and Australia can build it for them as well as supply the raw materials. For some irrational reason, our construction industries bypassed India where the doors were wide open and set up bases in the Middle East, particularly highly speculative places like Dubai, where they came to grief. The immensity of the India’s infrastructure challenge is shown by the fact that their roads and railways are woefully inadequate and more than fifty per cent of the homes in India are without power or water. We can also partner with them in the expansion of their impressive service industries that many nations, such as U.S, use significantly. There are many other possible avenues for profitable business for those willing to take pragmatic risks, particularly in industries like education and health.

There are also some downsides. There are far too many political parties and regional jealousies, while the Indian bureaucracy is massive and too many public servants want quiet payments on the side, but we have to acknowledge that corruption is a worldwide scourge and India is not the worst offender. The Hindu religion has some militant attitudes and the caste system still thrives even though it is denied. There are a few currency and investment difficulties to be overcome as well, but these are worldwide problems, especially as we know that there are some investors who find Australia to be a difficult place to do business with.

Which leads me to the key issue that I want to highlight. I reckon that one day India will become the equal of China in economic power because, in the long term, democracy always creates better economic returns than totalitarianism and, right now, China’s formerly rock solid face of political control is showing some cracks in its armor. We must make sure that Australia is part of its rise to prosperity and power. Not to do so will be a significant error of judgment on our part and a poor piece of strategic planning, particularly as most Indians speak English, this being a very important advantage over China in the vitally important process of trade negotiations. Unimportant as it may seem. The fact that we are a powerful cricketing nation puts us in high regard in India where cricket is a religion that has a billion followers and powerful financial backers.

About the Author

Everald Compton is Chairman of The Longevity Forum, a not for profit
entity which is implementing The Blueprint for an Ageing Australia. He
was a Founding Director of National Seniors Australia and served as its
Chairman for 25 years. Subsequently , he was Chairman for three years of
the Federal Government's Advisory Panel on Positive Ageing.